FIG (Banks & Insurance)
An insurer runs a 103% combined ratio. Can it still be profitable — and should every insurer target sub-100%?
Model answer
Yes, it can be very profitable: a 103% combined ratio means a 3-point underwriting loss, but the insurer earns investment income on its float and its own capital, which can far exceed that loss — the…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from FIG (Banks & Insurance)
- Why is EV/EBITDA a meaningless multiple for a bank?
- Why does a standard unlevered DCF fail when you point it at a bank?
- Why do bankers value financial institutions on equity value only, never enterprise value?
- What does it mean when people say 'debt is raw material, not capital structure' for a bank?
- Why are capex and working capital effectively undefined concepts for a bank?
- Why is interest expense an operating item for a bank when it's a financing item everywhere else?